UAE Property: ‘Does an old property attract same rent as a new one?’

Question: We have rented a villa in Dubai for six years, always paid the rent on time and maintained it well. Our landlord has issued an eviction notice that will take effect nine months into our tenancy , claiming that he wants to sell the villa. We wish to remain in the villa for one more year because of our son’s need to complete his final year of school. We responded with a reasonable solution offering to either consider buying the villa, pay a rent that’s Dh12,000 ($3267) above the Real Estate Regulatory Agency index (an annual increase of 27 per cent), or give him one year’s notice so that we could stay for the full year, effectively avoiding the eviction. Despite a polite follow-up, the landlord has remained silent for a month. If we dispute the eviction in the courts, how likely are we to win? Should I sign the contract for nine months to get the Ejari or should I just pay the rent and not sign the contract? What evidence do we need to sue the landlord for compensation if he re-lets the villa following the eviction? ML, Dubai Answer: In all cases, it would be of benefit to all to find an amicable solution and given what you have described, it would appear to me that you have been more than reasonable in your approach to the landlord. If no communication to the contrary, a tenancy contract renews automatically under the same terms and conditions as before, so if the landlord doesn’t respond, he will technically be worse off than either his wishes or your proposal suggests. Assuming he comes back with no agreement in place, you will have no alternative but to fight your case through the Rental Dispute Settlement Committee. Here, the judge will look at your file and decide upon the outcome. Predicting the result is very difficult because the UAE law is not set on precedent, but attributed to the decision of the judge of the day. Judges look for parties to find solutions and compromises and your suggestions seem to be reasonable. With reference to the Ejari, it is better that you commit to an agreed solution that will then allow you to have the correct Ejari contract. However, if you move out earlier and subsequently find out that the landlord re-let the property to someone else, you can file a complaint at the RDSC. Gather as much information on any potential new tenant. The alternative is to get friendly with a real estate agency who has access to information on real-time data for transactions. These B2B platforms will show which properties have been sold or rented, so this would be enough proof that the landlord was not honest in his approach to your original eviction. Sometimes situations change and landlords cannot fulfil the stated reason of eviction. However, in such circumstances, the correct way would be for the landlord to offer first refusal to let the property at the same rent to the original tenant. Only if you decline the offer can the landlord re-let it legally, otherwise he is not allowed to for two years. Q: I rent a villa in Dubai that is more than 40 years old and has several outstanding maintenance issues. Despite this, my landlord has raised the rent by 20 per cent. I’m unsure if this increase is justifiable, especially considering the general rental trends, which are likely influenced by newer properties. While the index fails to consider the age of the property, do I have to continue paying higher rents for a villa that doesn’t meet the standards of newer properties in the area? KK, Dubai A: It is true that the Rera rental calculator doesn’t take into consideration aspects of the property in question such as age, condition, facilities, upgrades and views. While this is not ideal, rental life without the index would be unbearable for tenants, given that landlords could then do as they wished with regards to rental increases at renewal. My suggestion going forward would be to attempt to get the landlord to be reasonable in their approach to the rental price for renewals. Any landlord would wish to maximise their income, especially when rents are on the rise. However, I still believe that there is a benefit in you meeting the owner face-to-face in an attempt to get him to be reasonable with the increase. It is true that a landlord has the right to raise the rent at renewal (given certain factors only) but by a maximum of 20 per cent in any one year, but this is not a blanket statement. It also has to be in line with Decree 43 of 2013. You have two further options: the first could be to ask the landlord to obtain a rental valuation from the Dubai Land Department and use the decree to determine the increase. This may lead to another increase for the renewal, but perhaps not as high as the 20 per cent the landlord is asking. The last resort would be to file a case at the RDSC to explain to a judge that you wish to remain in the property and pay the rent, but only if the landlord is reasonable, especially given the villa’s age and condition. Mario Volpi is head of brokerage at Novvi Properties and has worked in the property sector for 40 years in London and Dubai. The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario@novviproperties.com